Volatility in the Nasdaq-100 is above recent realised moves, even as big tech stocks slide on growth and trade worries. One options trader is using that gap to sell premium on QQQ.
01Summary
- 01QQQ's implied volatility index closed Monday near 20.7%, roughly in line with the Russell 2000's level and above the S&P 500's 15%.
- 02For 29 straight sessions, QQQ's implied volatility has stayed at least three points above the volatility the index actually delivered.
- 03A trader is selling the November 13 720/710 put spread for a credit of about $1.81, with a maximum profit of $181 and a maximum loss of $819.
- 04The trade has a 70% theoretical probability of profit and an 80% theoretical chance of collecting half the maximum profit, according to the story.
- 05Key risks this week include CPI on Wednesday, bank and Taiwan Semiconductor earnings, and Microsoft and Alphabet results alongside the Fed decision on Oct. 28.
02Why it matters
The story shows that market fear is running ahead of the actual moves in Nasdaq-100 stocks, which can shape how traders position themselves. It also flags near-term events that could jolt technology shares and broader US indices.
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